Sri Lanka: Seventh Review under the Stand-By Arrangement and Requests for Waivers of Nonobservance of Performance Criteria, Extension of the Arrangement Period, Rephasing of Purchases, and Establishment of Performance Criteria—Staff Report; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Sri Lanka.
This paper discusses Sri Lanka’s seventh review under the Stand-By Arrangement and requests for waivers of nonobservance of performance criteria. The strong economic recovery continued in 2011, with growth estimated at 8¼ percent. Activity was robust across all sectors, supported by healthy exports and strong growth in domestic demand. Agriculture recovered from flooding early in the year, and is expected to grow at 6 percent. The rupee came under increasing downward pressure in the second half of 2011, especially after the size of the trade deficit became apparent and started to weigh on sentiment.